Why government suspended PDS

Government of Ghana in the late hours of Tuesday, July 30 announced the
abrogation of the contract with Power Distribution Services barely six
months after the company took over from the Electricity Company of
Ghana.

In a statement signed by Information Minister Kojo Oppong Nkrumah, it
disclosed that “the decision follows the detection of fundamental and
material breaches of PDS obligation in the provision of Payment
Securities (Demand Guarantees) for the transaction which have been
discovered upon further diligence. The Demand Guarantees were key
prerequisites for the lease of assets on 1st March 2019 to secure the
assets that were transferred to the concessionaire.

It further indicated that steps were underway to unveil the details
that went into it as government is conducting a full enquiry into the
matter.

Checks by Ghanaweb have also revealed that following the transfer of
ECG’s assets and operations to PDS on the 1st of March, 2019, ECG,
acting as the beneficiary of the Demand Guarantees, has subjected the
Guarantees submitted by PDS to further due diligence tests.

ECG received a letter from Al Koot, dated 16 July 2019 that claims,
among other things, that the officer who executed the Guarantees from Al
Koot was not authorized and that the Guarantees are null and void. The
letter also stated that the officer had committed fraud.

Insider information further revealed that the alarming development
resulted in meetings with officials of Ministry of Finance and ECG as
well as with President Akufo-Addo.

After the meetings Government decided to crosscheck the information
contained in the Disclaimer Letter by sending a Delegation of
Stakeholders to Doha, Qatar, on Wednesday, 31st July 2019 to meet with
officials from Al Koot.